The Euro forged a definitive fresh new low for the move overnight but it has managed to recoil from thelowest levels since last September. As mentioned in the Dollar coverage, the Euro was initially pressured bydisappointing German economic survey results and perhaps the Euro is indirectly under pressure because ofFrench government and political events. In addition to the turmoil among current French leadership levels, theEuro might be indirectly undermined by reports of legal trouble for Christine Lagarde (the current head of theIMF). While the Euro might see some short covering off hopes that the Ukraine situation could calm down, themacro-economic differential situation looks to remain squarely on the back of the Euro. The euro can bounce butwe don’t see the justification for a sustained recovery.
Technical Outlook: Daily stochastics are trending lower but have declined into oversold territory. Themarket’s short-term trend is negative as the close remains below the 9-day moving average. The outside daydown is a negative signal. The swing indicator gave a moderately negative reading with the close below the 1stsupport number. The next downside target is 131.3225. Selling may soon dry up since the RSI is under 20indicating the market is extremely oversold. The next area of resistance is around 131.9650 and 132.3025, while1st support hits today at 131.4750 and below there at 131.3225.